There have been a lot of comments about last night’s State of the Union address by President Obama.
One of the issues that the President has put on his agenda is current Federal Minimum Wage rate that businesses are obligated to pay their employees. Of course this subject has raised the cackles of the Republican Party who think that there is too much government intervention into business already and is trying to reduce it even more. The Democrats for the most part back the plan to raise the minimum wage from $7.25 per hour to $10.10 per hour, which based upon a 40 hour work week would equate to an annual gross pay of 21,008, up from $15,080.
FYI, the 2013Federal poverty guideline is an annual income of $23,550 for a family of four. This is the most commonly used statistic. Add $4,020 for each additional person to compute the Federal poverty level for larger families. Subtract $4,020 per person to compute it for smaller families.
I agree with most people that Government should not be trying to generate jobs or be involved in the process of employment. Government should focus on the original intent of the Constitution.
However, a lot has happened since the writing of the Constitution in 1776; technology and population growth are two key factors. In the seventeen and eighteen hundreds, the entire population was self sufficient, they plowed their own fields and grew their own food. They hunted and trapped for meat and fur that they used for nourishment and warmth. Whatever extra bounty they had from their efforts they sold or traded for things they needed and could not make for themselves.
When the nineteen hundreds came around we saw the industrial revolution. People were brought hired in mass by factories to build things and these factory workers were then, in a sense, slaves to the companies that built the factories. Factory profits were high and wages were low. Workers lived pay check to pay check. Enter the Unions who fought for the workers for fair wages and benefits.
After the stock market crash and the Great Depression, things started looking up for the American workers and throughout the 50’s and 60’s the middle class started building a little nest egg as corporate profits rose, so too did wages and benefits in appreciation of a job well done.
The 70’s were a bit rough with a few minor economic hiccups that economists call “market corrections.”
The real problem began in the 80’s when computer technology and automation began to replace human labor. At first it was in the name of efficiency, accuracy, and speed. But when corporate America found that they could increase profits by decreasing human overhead, then the layoffs started.
The 90’s were all about the “bottom line” and when cheep labor was found in Asia, most of the physical labor was shifted overseas leaving only administrative and high level jobs, sitting at a computer, the only real permanent employment available for the American worker.
Those people without the higher education skills were then forced to find other labor type jobs. Enter the ever growing fast food and retail industry.
Fast food jobs used to be entry level positions for teen age workers to earn a little extra spending money. But as more and more adults found themselves unemployed they turned to McDonalds, Burger King and other retailers for employment. These adult workers not only displaced the teen age job seekers but were willing to work for the same teenage wages just to have an income. With 40 hours worth of pay, they were barely getting by.
But a forty hour work week was hard to come by as corporations found that they could again reduce overhead by limiting workers to fewer than 30 hours per week and not be required to pay for insurance. The result, a growing workforce of under employed and under insured that could not properly feed or care for their families.
Many of these workers sought to work two jobs in an effort to bring in enough money but that attempt was thwarted when their current low pay employer would not assign regular hour shifts but instead required them to be available, as needed, for any shift and making it impossible to know from one week to the next the hours that they would be working.
So what is the solution? Just like the growing drug problem of the 60’s, 70’s, and 80’s; or the predatory interest charged by so called banks or loan company’s; there needs to be some sort of intervention to help bring workers back to their feet.
It is clear that corporations are only interested in their bottom line profits and pleasing their shareholders/investors and will continue to do whatever is needed regardless of how adversely it affects the workers.
Enter the Federal Government who must now referee and try to regulate something that the private sector should be doing on their own out of concern for their fellow mankind. But alas, Corporate Social Responsibility is not a bottom line balance sheet item.
Both the growth in population and automation has lead to a disproportionate number of available full time jobs for the number of workers in need of jobs…and that gap continues to grow wider.